Populism – the Revolt of the Farmer
By the last half of the 1800s the Homestead Act of 1862 and farm mechanization
inspired by the industrial revolution greatly increased agricultural production –
that’s a good thing . . . but its effect on the farmer is a depressing story that can be
told by interpreting the below chart.
Wheat and corn prices, per bushel, 1867 and 1889
Year
1867
1889
Wheat
$2.00
.78
Bushel
8 gallon
=
=
Corn
$0.78
.23
8 gallon
1 bag
Can you see that farmers need to make 2 or 3 times the crop to pay off long term
debt such as their mortgage . . . and if all farmers are in the same situation, and
they are, what happens to the price per bushel . . . it will go down more!
So is the dilemma of the farmer – the more he makes the less it is worth . . . if he
makes little, prices will be high but he will have little to sell.
The “dilemma of the farmer” identified several of his complaints that he
considered “unfair” as he worked from ‘dawn to dusk’ to maintain his economic
existence:
Farmer’s complaints:
 Low prices – see chart, the more he makes the less it is worth
 Insufficient and expensive credit – bankers considered farmers a ‘high
risk’ because of intangibles such as bad weather, crop failures, low prices,
etc. Since they were ‘high risk’ they paid a higher interest on loans.
 High rates charged by ‘middle men’ – farmers, historically, receive about
½ price that city consumers pay for agricultural products. Middlemen
receive the other half for service. Examples include: grain elevators
(storage houses), packing houses, insurance companies, railroads, etc.
 High industrial prices for farm equipment – farmers blamed high
industrial prices on two factors:
1) High tariff rates – to protect American industry from foreign
competition
2) The growth of business monopolies such as railroad trust – trust
eliminated competition.
Farmers did everything possible to keep ‘a float.’
Tens of thousands fell into the trap of the crop lien system – they mortgaged their
next years crop for seed and supplies to merchants. Hopefully, they would have a
little bit left over to support their families . . . but sadly, thousands lost their farms.
As we know farmers began to fight back. Farmer’s alliances appeared in some
states to form their own ‘cooperative stores.’ In other words, they acted as their
own merchants. Farmer alliances were somewhat successful but farmers had many
more problems to address.
Farmers also formed alliances called Granges. The Granges became political
units that managed to address the farmer’s problems with middlemen by passing
‘granger laws.’ The Supreme Court said state Granger Laws were
‘unconstitutional.’ So . .
Congress supported the farmers by passing the Interstate Commerce
Commission in 1886. The ICC was the nation’s first regulatory agency and its
first mission was to make railroad rates fair.
But farmers still were slaves to the catch 22 dilemma if they made decent crops,
prices would be low . . . so no matter what laws were passed, what agencies were
created or what ‘cooperative stores’ were organized, farmers need more money!
At this time the country was struggling with its own problems concerning money,
specifically, ‘what is the base of the U.S. Dollar?’
For most of the 1800s the dollar was based on a ‘bimetallic’ system of money,
however it was essentially a Gold Standard as very little silver was ‘monetized.’
As early as 1836, the call was made to equate 16 ounces of silver to 1 ounce of
gold. “The free and unlimited coinage of silver” became the economic ‘battle
cry’ for those who advocated an increase in the money supply. Those included
were:
 Farmers – who wanted more pay for crops
 Miners – who mined the silver
 Laborers – who wanted an increase in wages
The results of increasing the money supply by adding more silver causes an
economic condition called:
Inflation: define
A rise over time in the average level of prices, or, the price of practically
everything goes up.
The problem with ‘free silver’ or turning all silver into money was strongly argued
by those who wanted money based on only gold. Gold is rare – silver is not –
today we have silver spoons/forks, trays and electrical circuit breakers. Today the
ration is about 62 to 1.
So money based on gold is strong and banks will not loan it to anyone that is high
risk or might not be able to pay it back.
Silver is inflationary. Silver-based money would give farmers more return for their
products and enable them to pay off long-term products and enable them to pay off
long-term loans on their land equipment.
In 1878 Congress passed the Bland-Allison Act to try to shut-up the silver interest.
This act allowed the government to buy more silver in turn it into money, but it
really was not enough to create the ‘inflation that farmers wanted or loosen up the
money supply.
By 1890 it was assured that the small amount of silver that the government was
purchasing monthly was not helping the economic interest of the farmer.
So in 1890 Congress and President Harrison made an ‘Economic deal with the
devil.’
The northeast/business interest wanted a higher tariff rate to protect U.S. industry
from cheap imports.
Farmers/miners/laborers wanted more silver purchased by the government to
increase the money supply.
So. . . Congress passed:
 The McKinley Tariff that set a 50% tariff on all imported goods
 The Sherman Silver Purchase Act – that doubled the amount of silver
being purchased.
The effects of passing these two acts were easily predictable (or should had been)
 The McKinley Tariff increased prices on foreign imports so much that
foreign made products were practically barred from the country
 The Tariff forced farmers to now buy nothing but American made products
(equipment) and businesses began to raise their prices to increase profits.
 People realized that silver was over-rated! They began to ‘cash in’ their
paper money and exchange silver for gold at a rate of 16 to 1.
 Everyone began to ‘hoard’ their gold as a way to assure their savings – most
did not have gold to hoard
 The results of the McKinley Tariff and the Sherman Silver Purchase Act
along with Harrison’s billion dollar Congress threw the country into a severe
depression called the Panic of 1893.
While the Panic of 1893 was materializing the frustrations of farmers came
together and formed a new political party or ‘third party.’
The new party consisted of various ‘popular issue groups’ that seemed not to be
satisfied with the way the two mainstream political parties addressed their
problems.
The new party was called the National People’s Party or Populist Party.
It consisted of mostly Midwest farmers, miners, and wage earning laborers.
In 1892 the party met in Omaha, Nebraska and nominated their first presidential
candidate, James Weaver. The tone of the Populist movement was personified by
the very fiery Mary E. Lease who challenged the farmers who were fed up the two
mainstream political parties to ‘raise less corn and more hell!’
The country re-elected Cleveland giving him the distinction of being the only
President elected twice but not consecutively.
Even thought the populist lost the 1892 election they did manage more electoral
votes than any other 3rd party in U.S. history.
Traditionally, 3rd parties tend to focus on a single issue such as abolition or
prohibition. Sometimes a dynamic or charismatic person becomes the center of
attention and not the party’s platform. – Not so with the populist.
Their platform expressed their concern with uncontrolled industrial capitalism.
Of course, the Populist platform had ‘that’ issue ‘the free and unlimited coinage
of silver.’ But the Populist Party was much more than that. Their remaining
issues must be discussed and understood because of the impact that they had on
U.S. history.
The Populist Platform:
 Free and unlimited coinage of silver
 Public ownership of railroads and communication system – railroads and
telegraph/telephones were the life line of the farmers – railroads and
communications systems only existed to serve people – it should not be a
profitable business for stockholders, it should be a government service.
 A graduated income tax (commonly called a progressive tax) is a tax on
income with a rate that increases as the amount to be taxed increases.
Explain tax bracket chart.
Tax Bracket
10% Bracket
15% Bracket
25% Bracket
28% Bracket
33% Bracket
35% Bracket
Amount
$0
$ 8,375
$ 34,000
$ 82,400
$171,850
-
$ 8,375
$ 34,000
$ 82,400
$ 171,850
$ 373,650
$ 373,650+
 The Direct Election of Senators – Populist wanted Senators elected by the
people of a state instead of state legislatures. The Constitution plainly states
‘each state legislature would elect 2 senators to a 6 year term.’
On the other hand, representatives would be elected by the people. Populist
believed that the U.S. Senate turned into a ‘millionaire’s club that was controlled
by trust and special interest.
The populist supported changing the Constitution by the amending process and
pass an amendment that empowers voters to directly elect their senators.
 The Populist platform also expressed the need for political reforms. They
felt that ‘tools’ needed to be created so they could ‘fix’ political problems as
the problems materialized: examples of political tools:
 The Initiative – allows people to by-pass state legislatures and propose new
laws by the petition process. Give Example:
 Referendum – by petition, citizens can require a law passed by the
Legislature to be placed on the ballot and be submitted to the people for a
vote.
 Australian Secret Ballot – ballots issued by the government with all
candidates names on it. The ballots are cast in secret. Before the secret
ballot, political parties printed their own ballots and voters voted in public.
The Populist platform had many more ‘planks’ on which the party stood, but of
course the silver issue, railroads, graduated income tax, and direct election of
senators had unwavering support.
After the 1892 election the Populist geared up for the 1896 election. Their
platform was well constructed but contrary to the economic needs of the nation.
President Cleveland had to repeal the Sherman Silver Purchase Act because of its
inflationary effect on the economy. He even borrowed 65 million dollars in gold
from J.P. Morgan Company to stabilize the money supply.
The Panic of 1893 was highlighted by:
 Strikes an labor unrest such as homestead steel and the Pullman strikes
 Coxey’s army march and arrest
 Reversal of legislative actions to relieve the panic. The McKinley Tariff
was lowered and its name changed to the Wilson-Gorman Tariff. The
Sherman Silver Act repealed but gold was stronger than ever.
By 1896 election time the country was coming out of the 1893 depression. The
author of the McKinley Tariff, representative William McKinley of Ohio, lost his
congressional seat but became a popular governor in his home state.
Proving he was a successful reformer in his home state, the republicans nominated
him as their candidate for president.
At the Democratic nominating convention, 36 year old Nebraskan William
Jennings Bryan gave an electrifying speech calling for the ‘free coinage of
silver.’
Cross of Gold Speech
If they dare to come out in the open field and defend the gold standard as a good
thing, we shall fight them to the uttermost, having behind us the producing masses
of the nation and the world. Having behind us the commercial interests and the
laboring interests and all the toiling masses, we shall answer their demands for a
gold standard by saying to them, you shall not press down upon the brow of labor
this crown of thorns. You shall not crucify mankind upon a cross of gold.
Students analyze document.
The speech, one of the most sensational in American Political history, gave
William Jennings Bryan the Democratic nomination for president.
The Democrats from the mid-western and western states influenced the national
Democratic party to adopt the call for free silver as a campaign issue – now the
Populist Party had a major problem . . . the democrats stole the biggest, widest and
most important plank in their platform!
Since one of the two major political parties endorsed the main concern of the
Populist, the free coinage of silver, all silver-interested voters would surely vote
for William Jennings Bryan. The Democrats are much better organized,
historically established and could carry the call for free silver from coast to coast.
The Populist knew there was no use to nominate a candidate; they had to support
the Democrat Bryan. They also knew to ‘not make waves’ and be vocal about
their other radical issues because that might scare voters away – after all silver was
the issue – everything else was secondary.
During the campaign, McKinley kept a low profile letting Republican money do
the work. He conducted a front porch campaign. He stayed at home, made
speeches to party supporter who in turn, they went home and gave the speeches to
the populace. The campaign relied on posters, buttons, and printed flyers.
The democratic Bryan ‘stumped.’ He criss-crossed the country on trains traveling
over 18,000 miles giving over 600 speeches in 27 states.
He ‘preached’ to the choir by spending most of his time campaigning to the midwest. Those were the Populist and Democrats who were already going to vote for
him.
The Republicans, business interest and supporters of the gold standard twisted the
arms of labor by targeting the vote of the northeastern union worker. They claimed
prices would increase – that would be good for the farmer but bad for city workers
who had to purchase what they ate. Inflation would increase and so would layoffs.
McKinley won – leaving the democrats licking their wounds. The Democratic
Party learned not to trust the attraction of a single issue and not to behave like a
third party.
Farmers did get some relief during the next two decades due to European conflicts
and the war years of 1914 – 1918. They were able to export food stuff overseas.
A new Alaska gold rush eased the money issue as the government purchased it and
backed new money. It was short relief and the money problem would rise again in
the near future.
The Populist faded into history; most voters returned to the Democratic Party . . .
but their platform, less the silver plank, was very solid and attractive to the next
group of Americans who vowed to “clean up” some of the political, social and
economic messes created by the Gilded Age. They are the Progressives.